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let me give you a scenario and see if
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this is familiar to you your algo
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strategy has identified a trade
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opportunity all the rules of the
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strategy were fully satisfied and the
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algo now confidently goes ahead and
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places the buy order within a few
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seconds the price reverses and your s is
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hit sounds familiar right well this is
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the story of most new algo Traders in
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this video I'll explain one of the most
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common reason why this is happening
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we'll also talk about the trading 's
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best support and resistance indicator
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and how it can help the situation we'll
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walk you through its python version that
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I built I will also explain how you
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could use this python utility for free
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in your own algo and say goodbye to bad
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trade entries so let's get
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started this your first time here
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welcome my name is VI and I'm a
0:38
financially independent Alo Trader this
0:39
channel is all about building a
0:40
community of algo Traders we discuss
0:42
everything about Alo trading using
0:43
python building and practiceing trading
0:44
strategies Market updates much more
0:47
please do visit our community website
0:49
trader.net Channel Fab wealth where I
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talk about my own Financial Independence
0:53
journey and Shar tools methods and
0:55
strategies that help me achieve my
0:57
Financial Freedom thank you
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during my initial days of algo trading I
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used to run into that scenario very
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often I used to think I have the perfect
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strategy I've back tested it multiple
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times my confidence was high and yet
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when the first order went out within a
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few seconds the price reversed and myel
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was hit right it was a bit frustrating
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because the wind ratio was nowhere
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closer to what it looked like when I was
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back testing it um I know the there's
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nothing wrong with the strategy there's
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nothing wrong with the timing of the
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trade as well but what I did find out is
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that the the problem was with the the
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price point at which the order went out
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most of often what happens is the buy
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order is placed very close to an
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existing resistance line so when the
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price starts moving uh it hits that
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resistance and then even if it is
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temporarily pulling back uh you know you
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your SL would hit and then the price
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would start continuing in that direction
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that you wanted it to similarly in case
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of a sell order if you place it very
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close to a support uh you would you
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would end up with the same situation
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where the the SL SL being
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hit when I was looking for a solution to
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this I came across this particular
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wonderful trading view indicator called
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the support resistance Dynamic by the
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loansome blue I'm sure you aware of this
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indicator is one of the most popular
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indicator on trading view uh and one of
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the most simplest and the accurate
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indicators that you can come across the
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way this indicator works is very simple
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all it does is basically looks at all
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the turning points of the prices and
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then generates this various pivots and
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then it also generates channels equal
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size channels and then more pivots
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within that channel indicates that you
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know there's a lot of there's High
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chances of price basically turning back
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because in the history that that
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particular Zone acted as either a
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support or resistance and based on that
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this indicator draws these uh Sr lines
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and when I paper tested it it it worked
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wonderfully well but now the the only
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problem is this is in Pine script and
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this is on trading view but my algo
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platform is based on python uh so there
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was no way I could use this indicator
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directly there uh and that's when I had
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to basically sit down and rewrite the
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spine script into Python and this is the
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python code uh for that indicator uh it
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simply requires num and pandas as
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dependencies to be installed um and the
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way it works is pretty simple you give
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it a symbol and then you you say what
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time frame you need this on uh right now
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I've given a daily candle and then you
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can even go as low as 5 minute and then
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it'll still work and then once you run
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it it'll provide you the uh the support
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and resistance levels as seen on the the
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trading VI indicator this code is
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available for you to freely download
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this from our community website I'll
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provide the link as usual in the
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description uh the only change you might
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have to do is currently I'm using zeroa
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to get historic uh data so depending
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upon which broker you're currently using
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uh you know you may want to change the
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code a little bit to get the historical
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data so this this particular line is
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what you might have to change this this
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function is you'll have to replace it
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with your own function to get the data U
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apart from that the code works just fine
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now that the the code is run let's try
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and compare what we got here and see if
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this is accurate with with what we see
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view well on trading view we have these
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five levels and this is exactly what the
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the python also provided us so we know
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that the the exact numbers match so we
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know that the code really works uh so
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now that you have the code you can run
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it on your own for various uh
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instruments and then please do give me
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some feedback on how this is
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working well now that we know that the
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indicator is there the python version
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works and all that the question now is
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like okay how do we really use this in
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your algo right so the way I'm currently
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using it is there is a small function
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which takes in the symbol that I want
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and then the price point at which I'm
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trying to uh you know enter the trade
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into and then the the the function
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basically checks if it's very close if
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it's a long trade it will basically
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obviously look for all the resistance
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levels if it is a short trade it to look
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for all the support levels and then if
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my price the entry price or requested
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price is very close to uh any of the
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levels and then it basically returns
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back either a true or a false confirming
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whether I should go ahead with a trade
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or not based on that the python is
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already coded in such a way that it
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tries to avoid such trades uh and
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thereby you know you you avoid some some
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bad entries in case you want me to uh
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you know provide that code as well uh
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the code that I just talked about uh
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please do mention that in the comment um
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if there's enough interest for it I'll
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create another video where I'll also
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provide you the entire code uh which can
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do all of that the spot checking uh and
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then you can you can just take that and
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plug it into your respective alos if you
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genuinely found this video useful please
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consider subscribing and liking the
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video and I will see you soon in another
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video and until then take care and happy
